Customer Strategist Journal
The Customer Strategist Journal

Date: 03/24/2010

Issue: Volume 2, Issue 1

People: Mila D'Antonio

The Mathematics of Profitable Marketing

Cabela’s uses predictive analytics to formulate a customer interaction strategy that maximizes the spending of each individual customer.

In the book Moneyball: The Art of Winning an Unfair Game, which chronicles the Oakland Athletics' analytical approach to assembling a competitive baseball team, author Michael Lewis illustrates in a few words why data overload can be disastrous. He quotes baseball writer, historian, and statistician Bill James: "I wonder if we haven't become so numbed by all these numbers that we are no longer capable of truly assimilating any knowledge which might result from them."

This quote still resonates today because it represents the state of most enterprises: having the ability to collect rafts of customer data across myriad touchpoints, only to be paralyzed by the vastness of that data and unable to forecast how customers will behave.

Using predictive analytics to mine their data, companies can determine the best action for a given situation, find patterns that can guide decision making, and uncover actionable predictions for each customer. These predictions can encompass all channels—both online and offline—foreseeing which customers will buy, click, respond, convert, or cancel. When considering thousands of factors, and a universe of millions of customers, predictive analytics connects the dots, guiding each decision to greater success.

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